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Loss of Use provision question

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sweetiesmom09

Junior Member
What is the name of your state?PA

In my current HO renewal for mid-July, my HO insurance company has changed my Loss of Use coverage from "Actual Loss Sustained to 30% of my dwelling coverage. I spoke with my agent and he informed me this is a company-wide change. I have had this policy, along with auto coverage from the same company, for 4 years now, and otherwise am happy with the company. I'm claim free so I cannot speak to that aspect, but my rates have been stable and the agent I have is responsive and easy to deal with.

I looked at several online quotes to see whether I can get another policy for a reasonable rate that will give me the Actual Loss Sustained for Loss of Use. I only found one company that seems to still offer this coverage (although I did not call the several companies that don't provide online quotes). In addition to still offering actual loss coverage for Loss of Use, the coverage was a bit higher on the dwelling and the rates are a bit lower. However, I am hesitant to change because I was insured with this company for 5 years before I had my current policy and my experience is that they tend to offer very low rates and then raise them substantially after the first two years. When I had them before, my rates increased at least 15% each year I was insured by them. But even more than that, I'm concerned that it seems like this percentage based coverage for loss of use is the trend for companies and if so, there is a possibility that the same change will be made in the new policy in the near future.

My question therefore is exactly that - based on your experience in the insurance industry, does it seem like I would be correct in suspecting it's likely the company currently quoting actual loss sustained for loss of use probably isn't far behind in changing to the percentage coverage too? My instinct is to stay with my current company but I don't want to make the wrong decision.

Thank you for any insights you may provide.
 


Zigner

Senior Member, Non-Attorney
Yours is not a legal question, nor is it a question that's even answerable
 

adjusterjack

Senior Member
Yours is not a legal question, nor is it a question that's even answerable
Did you forget about me, Zig? LOL.

based on your experience in the insurance industry
35 years in it.
:)

does it seem like I would be correct in suspecting it's likely the company currently quoting actual loss sustained for loss of use probably isn't far behind in changing to the percentage coverage too?
I have never seen a homeowners policy that didn't list dollar amounts for coverage A (Dwelling), B (Other Structures), C (Personal Property), D (Loss of Use - formerly known as Additional Living Expenses).

Traditionally, Coverage D was 20% of Coverage A. My policy is also 30% of Coverage A. You still are covered for your actual loss sustained up to the limit.

I suggest you look at the declaration page of your previous policies and look for the Coverage A, B, C, and D numbers.

I think you may find that you have always had a dollar amount shown for Coverage D which was a percentage of Coverage A.

At any rate, it's a non-issue. My policy has $208,000 on the dwelling and $62,400 on Loss of Use. At even $3000 per month I'm looking at 20 months, certainly long enough to rebuild or buy another house without using it all up.

As for changing companies, as long as you are satisfied with the rates and service, it's better to stay put.
 

Zigner

Senior Member, Non-Attorney
Did you forget about me, Zig? LOL.
Not at all -

The OP's question was about the appropriateness of suspecting that a certain unknown entity might change their policy at some undefined point in the future. As phrased, and with the information provided, there really is no way to answer that question ;)
 

sweetiesmom09

Junior Member
OK thanks and thank you Adjusterjack. Even though not addressing my actual sort of philosophical question, still makes me feel better about the whole thing. Sorry I asked a question not in keeping with the forum.
 
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